Closing Time: The Last Step Before Stepping Into Your First Home

There are piles of articles on how to find a house, but really that's the easiest part. You see something you like close to your price range and wham – house found. Here you'll find out all about the closing process, which is easily the longest and hardest part of moving into your dream house. Well, except for carrying all those boxes.

By David Plough

How does one choose a house? What happens if some guy steps in and gets the house you wanted? Where does that guy get off? Doesn't he know it's a buyers market and he could have offered less than you did? How do you deal with not getting that house? These are all questions that you will ask yourself once you start looking at homes.

The first one is probably the most important question. After you have started the home buying process choosing a house becomes a chore. If you are buying for your self, then you just have to weigh out positives and negatives of any given property. If you're buying with a significant other, then you have to learn how to sell them on what you like and you have to learn what they like. Things like neighbors and location are two of the biggest things you need to pay attention to. Remember being the nicest house in a bad neighborhood hurts you worse on resale then being the worst house in a nice neighborhood does.

Now let's fast forward. You have found a place and decided to make an offer. You and your realtor have decided on a good starting price (never offer full right off the bat. Sure there are exceptions to this rule… but really, don't do it). You fill out the paperwork, you're really excited, your realtor lets you know they are fully confident in the process and they believe you will be able to get this house. You start planning on what you are going to do with the place. Rooms are going to change, yard work will be done, and there will be paint. A few days pass, you hear nothing. Finally, your realtor calls, someone else got the house.

There is a certain type of depression that always set in on after that phone call. After talking to a few people I get the impression that it happens to most everyone in this situation. You are beat mentally. You have just offered these people a substantial amount of money for a home. A place you were going to install a home theater, a place that was perfect for your all night drunken Guitar Hero sessions, and now it is someone else's. When this happens you don't feel like looking at houses anymore. On more then one occasion I felt like just going back to the apartment life. This, like most other depressions, is only temporary. You have to push through it and start looking again. Go ahead and take a day off from searching, you will be burnt out on houses and nothing will satisfy you, but more than a day off and you could miss that dream house down the road.

After you have encountered this scenario once or twice (it was five times for me), you will eventually find that house that is a perfect mix of inexpensive, likable, and available. You make your offer, it is accepted, and now you move onto the closing process.

There are horror stories about the closing process, and there are stories of people being done with it in less than 90 minutes. Chances are you will fall somewhere in between. Depending on your loan, the bank giving it to you, and the people you are buying from, you will have to go through inspections, appraisals, and a lot of general bureaucrat BS.

You will haggle with the seller and the bank about who pays for the inspections. Some of the appraisals will need to hit a certain number, but not go over another number. Sometimes the people you deal with simply will not like the offer they accepted and try to make your life hell until you close. These are all things you need to expect and be prepared for.

Some of the typical inspections you should or may have to have done are on the roof, electrical, plumbing/sewage, and termite. The appraisals you may have to have done could involve the flooring, actual home value, and estimated repairs. While most of these will come out of the sellers' pocket, you should look into having whatever they don't pay for done yourself. This is a lot cheaper then just buying a house then finding out it has termites.

While these things cost money, you can get reimbursed for some of it. For instance, due to my place having been a repo which was being renovated; we had to have a flooring estimate done. We told our chosen company what number needed to be hit; they came out, looked at our house, and gave us an estimate for that amount. The estimate was taken to the loan company and then we got reimbursed from the seller. While we have spent more then the initial estimate it's nice that we were able to get that amount back.

Once all the hunting and red tape is done, it's time to close. Your closing date is like winning your own personal Super Bowl. You have survived, done all that was asked of you, and after filling out a lot of paperwork you will get your ring. This part is surprising painless when compared to every other step of the process. You go into an office, meet with realtors, they explain some papers for you, show you where to sign, and after a while (anywhere between 30 minutes to 3 hours) you will be a home owner.